Breaking It Down: What’s In The Cost Of Your Ticket?

It used to be, that when you searched for airline tickets, there was always an asterisk leading to a comment that said something to the effect of “plus taxes and fees.”  Almost a year ago exactly, a new rule from the U.S. Department of Transportation changed that. Now, all of those “taxes and fees” are included with the advertised fare for your flight. But, when you really break the cost of the tickets down, what’s in the cost of your ticket?

[caption id="attachment_262" align="alignright" width="300"] Taxes and fees are now included in the cost of your advertised fees. Find out what those include.[/caption]

Typically, the cost of a ticket covers your base fare, which is the expense of getting you from point A to point B plus a little profit, and the aforementioned taxes and fees.  Today, we’ll take a look at just the taxes and fees that you see on domestic tickets. International airfares may be different.

Federal Excise Tax

This is a tax equal to 7.5 percent of your base fare. It’s collected by the airline and transferred to Uncle Sam to fund the Airport and Airway Trust Fund. That pot of money pays for, among other things, the Federal Aviation Administration and air traffic control system. I don’t know about you, but I’m comfortable paying for that since they do keep the skies safe and moving.

Flight Segment Tax

The flight segment tax also funds the Airport and Airway Trust Fund. So, what’s the difference? This tax is calculated by the number of take-offs and landings you make as part of your trip, or segment. Currently, you pay $3.70 for every one takeoff and one landing pair you make.

Passenger Facility Charge

This is a fee rather than a tax, but it’s collected by the airline and distributed to airports like RDU. It’s also based on every segment, or takeoff and landing pair. The amount varies  but can be up to $4.50 per segment (RDU’s is $4.50 as are most airports), but no more than $18 for your entire trip. As airports, we rely on these fees for a number of facility projects such as improving taxiways, runways and terminals. Terminal 2, for instance, was funded in part by PFC fees.

September 11 Security Fee

This small, $2.50 fee is also collected by segment, but caps out at $10 per flight. It’s the funding source for the Transportation Security Administration.

In future posts, I'll discuss the base fare more in depth.  From maintenance to salaries, I’ll show you just how much you pay for when flying.  And, we'll discuss why fares can be one price today and dramatically different tomorrow.